ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
This
matter is before the Administrative Law Court (“ALC”) for a final order and
decision following a contested case hearing pursuant to S.C. Code Ann. § 38-43-130(G)
(Supp. 2006). Petitioner Ernest M. Gause (“Gause”) challenges the decision of
Respondent South Carolina Department of Insurance (“Department”) denying his
application for an insurance producer’s license pursuant to S.C. Code Ann. § 38-43-100
(Supp. 2006) and § 38-43-130(A), (C)(1). The Department found that Gause
provided “incorrect, misleading, incomplete, or materially misleading
information” in his license application. After notice to the parties, the
court held a hearing on this matter on September 12, 2007. After carefully
weighing all of the evidence, the court finds that Gause’s application for an
insurance producer’s license should be denied.
FINDINGS
OF FACT
Having
observed the witnesses and exhibits presented at the hearing and closely passed
upon their credibility, and taking into consideration the burden of persuasion
by the parties, the court makes the following Findings of Fact by a
preponderance of the evidence.
In
February 2007, Gause applied for a license to work as an insurance producer at World
Finance in Kingstree, South Carolina. The Department denied Gause’s
application because the
Department’s records indicated that Gause had an insurance producer’s license
permanently revoked
in 1986 because Combined Insurance Company of America, the insurance company he
worked for at the time, “reported that [Gause] had forged two checks issued by
Combined’s policyholders.” Gause failed to disclose this information on his
application to the Department. On the last page of the application, Gause
certified that “under penalty of perjury, all of the information submitted in
this application and attachments is true and complete. I am aware that
submitting false information or omitting pertinent or material information in
connection with this application is grounds for license revocation or denial of
the license . . . .”
At
the hearing, Gause fully accepted culpability for those actions and the failure
to disclose them in response to specific questions on the application. Question
Two asked whether Gause had “ever been involved in an administrative proceeding
regarding any professional or occupational license” and defines “involved” to
include having a license revoked. Question Six asked whether Gause had ever
had a “business relationship with an insurance company terminated for any
alleged misconduct.” Upon reviewing the questions, Gause agreed that he
answered these questions untruthfully. However, in his defense, he testified
that the misconduct occurred over twenty-two years ago and that he was young
and made a mistake.
Gause
further stated that he did not realize he was being untruthful at the time
because he relied upon another individual’s advice that he need not disclose
incidents that took place that long ago. However, the Department presented
evidence that Gause had initially submitted his application through the
Department’s on-line application website and received a message informing him
that he must submit a paper application to the Department because he had a
previous license revoked.
In
support of his application, Gause further testified that since 1986, he attended
the criminal justice academy, worked for the sheriff’s department and police department
in Winnsboro, South Carolina, and has worked as a private investigator for GIS
Services. Gause feels that he has paid the price for his mistakes in the past
and would like another opportunity to work in the insurance industry.
Glenn
Harrell testified in support of Gause’s application. Harrell employed Gause as
a private investigator and believes him to be trustworthy. Harrell stated that
he has trusted Gause with his credit cards and keys to his home and office.
Harrell further testified that Gause is hardworking and diligent and that by
knowing Gause, he could understand how Gause could misunderstand the
application’s questions and answer them incorrectly.
LAW
Based
upon the foregoing Findings of Fact, the court concludes the following as a
matter of law.
1. Jurisdiction
Jurisdiction
over this case is vested with the South Carolina Administrative Law Court
pursuant to S.C. Code Ann. § 38-43-130(G) (Supp. 2006) and S.C. Code Ann. §
1-23-600(B) (Supp. 2006). The weight and credibility assigned to evidence
presented at the hearing of a matter is within the province of the trier of
fact. See S.C. Cable Television Ass’n v. S. Bell Tel. & Tel. Co.,
308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992). Furthermore, a trial judge who
observes a witness is in the best position to judge the witness’s demeanor and
veracity and to evaluate the credibility of his testimony. See, e.g., Woodall
v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v.
Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).
In
presiding over this contested case, the court serves as the finder of fact and
makes a de novo determination regarding the licensing matters at issue. See S.C. Code Ann. § 1-23-600(B) (Supp. 2006); Marlboro Park Hosp. v. S.C. Dep’t
of Health & Envtl. Control, 358 S.C. 573, 577-79, 595 S.E.2d 851,
853-54 (Ct. App. 2004); Brown v. S.C. Dep’t of Health & Envtl. Control,
348 S.C. 507, 512, 560 S.E.2d 410, 413 (2002).
2. Insurance
Producer’s License Requirements
To be licensed as an insurance producer, an applicant must be
at least eighteen years of age, must have completed a prelicensing course of
study for the lines of insurance for which the person has applied, must paid
the fees required by § 38-43-80, and must have passed the applicable
examination unless exempted pursuant to § 38-43-100(A). § 38-43-100(F). Further,
before issuing a license to an insurance producer, the Department must find
that the applicant “is a person of good moral character and has not been
convicted of a felony or any crime involving moral turpitude within the last
ten years that is a ground for denial, suspension, or revocation as provide for
in Section 38-43-130.” § 38-43-100(F)(2). Section 38-43-130 provides that “[t]he
director or his designee may . . . refuse to issue or reissue a license when it
appears that a producer . . . has willfully deceived or dealt unjustly with the
citizens of this State.” § 38-43-130(A).
“[D]eceived or dealt unjustly with the citizens of this
State” is defined in the statute to include, among other things:
(1) providing
incorrect, misleading, incomplete, or materially untrue information in the
license application;
(2)
violating any insurance laws, or violating any regulation, subpoena or order of
the director or of another state’s director or his designee;
(3)
obtaining or attempting to obtain a license through misrepresentation or fraud;
(4)
improperly withholding, misappropriating, or converting any monies or
properties received in the course of doing insurance business;
* * *
(7) having
admitted or been found to have committed any insurance unfair trade practice or
fraud; [or]
* * *
(9) having an insurance
producer license, or its equivalent, denied, suspended, or revoked in any other
state, province, district, or territory . . . .
§
38-43-130(C).
3. Conclusions
After
carefully weighing the evidence and applying the law as discussed above, the
court finds that Gause’s application for an insurance producer’s license should
be denied.
Gause
has presented insufficient evidence to the court to overcome the fact that he
answered material questions on his application untruthfully. Gause testified
that he misunderstood Questions Two and Six and relied on another individual
who stated that since the revocation was twenty-two years ago, he did not need
to disclose it. However, Gause was put on notice that his prior revocation would
be considered when he initially applied on-line and received a message
informing him that he must submit a paper application to the Department because
he had a previous license revoked. Additionally, by using the word “ever,”
Questions Two and Six very clearly encompass any prior revocation or
termination and are not limited as to time period in any way. Accordingly,
Gause was required to disclose all responsive information, no matter how remote
in time.
The
court is impressed with Gause’s efforts following the revocation of his
insurance producer’s license in 1986 in attending the criminal justice academy
and serving in law enforcement. The court is also mindful of the support and
favorable recommendation offered by his former employer. Nonetheless, even if
Gause had completed his application accurately, it is questionable whether
Gause should be granted a license in light of the fact that he has had an
insurance producer license permanently revoked and the underlying cause of the
revocation, which involved altering the checks of two policyholders. Even
though this misconduct occurred a very long time ago, it was directly related
to his activities as an insurance producer. The Department, which is charged
with the duty of protecting insurance consumers by enforcing the licensing
statutes enacted by the General Assembly, saw fit at that time to bar him
permanently from the insurance industry. Gause failed to prove to the court by
a preponderance of the evidence that he should now be granted an insurance producer’s
license. Under these circumstances, the court finds that the Department’s
decision to deny Gause’s license should be upheld.
ORDER
Based upon the Findings of Fact and Conclusions of Law stated
above, it is
ORDERED that the Department’s decision to deny Petitioner’s application for an insurance
producer’s license pursuant to §§ 38-43-100 et seq. is upheld.
IT
IS SO ORDERED.
______________________________
PAIGE J.
GOSSETT
Administrative
Law Judge
October 23, 2007
Columbia, South Carolina
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